Fayette County Nat. Bank v. Lilly

Decision Date14 March 1997
Docket NumberNo. 23360,23360
Citation199 W.Va. 349,484 S.E.2d 232
CourtWest Virginia Supreme Court
PartiesFAYETTE COUNTY NATIONAL BANK, Plaintiff Below, Appellee, v. Gary C. LILLY, et al., Defendants Below, Appellants.

2. "Roughly stated, a 'genuine issue' for purposes of West Virginia Rule of Civil Procedure 56(c) is simply one half of a trialworthy issue, and a genuine issue does not arise unless there is sufficient evidence favoring the non-moving party for a reasonable jury to return a verdict for that party. The opposing half of a trialworthy issue is present where the non-moving party can point to one or more disputed 'material' facts. A material fact is one that has the capacity to sway the outcome of the litigation under the applicable law." Syl. Pt. 5, Jividen v. Law, 194 W.Va. 705, 461 S.E.2d 451 (1995).

3. Although our standard of review for summary judgment remains de novo, a circuit court's order granting summary judgment must set out factual findings sufficient to permit meaningful appellate review. Findings of fact, by necessity, include those facts which the circuit court finds relevant, determinative of the issues and undisputed.

4. A grantor may not assert, as a defense in a deficiency judgment proceeding, that the fair market value of real property was not obtained at a trustee foreclosure sale.

Kevin B. Burgess, Hamilton, Burgess, Young, Tissue & Pollard, Oak Hill, for Appellants.

Frederick A. Jesser, III, Fayetteville, for Appellee.

Deborah A. Sink and Charles B. Dollison, Bowles, Rice, McDavid, Graff & Love, Charleston, for West Virginia Bankers Association, Amicus Curiae.

DAVIS, Justice:

This appeal was taken by Gary C. Lilly and Neva P. Lilly, appellants/defendants below (hereinafter referred to as the Lillys) from an order by the Fayette County Circuit Court granting summary judgment to Fayette County National Bank, appellee/plaintiff below (hereinafter referred to as the Bank). 1 The Bank filed this action to recover the balance of a debt owed to it by the Lillys, after a deficiency arose from a trustee sale of real property owned by the Lillys. The circuit court's summary judgment order awarded the Bank $10,208.16. On appeal the Lillys contend that the circuit court committed error in not permitting them to argue, as an affirmative defense, that the sale price obtained for their real property was below the fair market value. The Lillys sought to offset the "fair market" value of their property against the deficiency. We disagree with the Lillys' position and affirm the circuit court's order.

I. FACTS

The facts of this case are straightforward. On February 18, 1992, the Lillys obtained a loan from the Bank in the amount of $35,000. The loan was secured by a Deed of Trust pledging 63 lots owned by the Lillys. Prior to granting the loan the Bank required the Lillys to have the lots appraised. The Lillys chose Mike Walbrown. 2 On January 24, 1992, Mr. Walbrown appraised the lots at a total market value of $94,000. The Lillys eventually defaulted on the loan. 3 During the period of default on the loan the Bank secured a second appraisal of the lots by Ronnie D. Sedlock, the son-in-law of the Bank's president. 4 On February 2, 1994, Mr. Sedlock appraised the lots at a total market value of $26,500. After the second appraisal the Bank required the trustee of the lots to execute the Deed of Trust. On March 7, 1994, the Bank purchased the lots at a public auction for the total sum of $26,500. At the time of the foreclosure sale the Lillys owed the sum of $33,850.93 on the original loan. It is undisputed that all statutory requirements of the State's foreclosure laws were followed. It is also undisputed that the Lillys did not seek to have the foreclosure sale set aside; but, instead sought an offset against the deficiency in the amount of what they perceived to be the fair market value of the lots.

On March 11, 1994, the Bank filed the instant action seeking to recover $10,280.16 from the Lillys. The amount sought by the Bank represented the difference between the amount owed on the original loan and the price obtained at the foreclosure sale, plus certain other costs and expenses associated with the sale. The Lillys filed an answer to the complaint. The Lillys alleged, as a defense, that the stated value of the lots was much higher than the sum of $26,500. 5 The Bank moved for summary judgment. By order entered June 12, 1995, the circuit court granted summary judgment for the Bank.

[199 W.Va. 352] The Lillys filed this appeal. Two issues are presented by the appeal: (1) the adequacy of the circuit court's order, and (2) whether the value of foreclosure sale real property may be litigated in a deficiency judgment proceeding.

II. STANDARD OF REVIEW

The focal point in this case is the appropriateness of summary judgment. "A circuit court's entry of summary judgment is reviewed de novo." Syl. pt. 1, Davis v. Foley, 193 W.Va. 595, 457 S.E.2d 532 (1995); Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). Our traditional standard for granting summary judgment is set out in syllabus point 3 of Aetna Casualty & Surety Co. v. Federal Ins. Co. of N.Y., 148 W.Va. 160, 133 S.E.2d 770 (1963), wherein we held: "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." In accord Syl. pt. 1, Williams v. Precision Coil, Inc., 194 W.Va. 52, 459 S.E.2d 329 (1995); Syl. pt. 2, Painter; Syl. pt. 1, Andrick v. Town of Buckhannon, 187 W.Va. 706, 421 S.E.2d 247 (1992).

Our cases have indicated that Rule 56 of the W.Va.R.Civ.P. is " 'designed to effect a prompt disposition of controversies on their merits without resort to a lengthy trial,' if there essentially 'is no real dispute as to salient facts' or if it only involves a question of law." Williams, 194 W.Va. at 58, 459 S.E.2d at 335, quoting, Painter, 192 W.Va. at 192 n. 5, 451 S.E.2d at 758 n. 5 (quoting, Oakes v. Monongahela Power Co., 158 W.Va. 18, 22, 207 S.E.2d 191, 194 (1974)). Rule 56(c) states, in pertinent part, that "[t]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

We noted in Williams, 194 W.Va. at 59, 459 S.E.2d at 336, the function of the circuit court at the summary judgment stage "is not 'to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.' " Quoting, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202, 212 (1986). In syllabus point 5 of Jividen v. Law, 194 W.Va. 705, 461 S.E.2d 451 (1995) we explained what, under Rule 56(c), is a "genuine issue" by stating:

Roughly stated, a "genuine issue" for purposes of West Virginia Rule of Civil Procedure 56(c) is simply one half of a trialworthy issue, and a genuine issue does not arise unless there is sufficient evidence favoring the non-moving party for a reasonable jury to return a verdict for that party. The opposing half of a trialworthy issue is present where the non-moving party can point to one or more disputed "material" facts. A material fact is one that has the capacity to sway the outcome of the litigation under the applicable law.

In accord Syl. pt. 2, Morton v. Amos-Lee Securities, Inc., 195 W.Va. 691, 466 S.E.2d 542 (1995). Finally, in Williams, 194 W.Va. at 59, 459 S.E.2d at 336 we noted that " 'credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.' " Quoting, Anderson v. Liberty Lobby, Inc., 477 U.S. at 255, 106 S.Ct. at 2513, 91 L.Ed.2d at 216. With these principles in mind, we turn to the issues in this case.

III. DISCUSSION

The parties agree that summary judgment would be inappropriate in this case, had the Lillys been allowed to defend this action on the basis that the sale price of their lots was below the fair market value. However, it is necessary to first clarify the problem presented by the contents of the circuit court's summary judgment order before addressing the Lillys' defense.

A. Adequacy Of The Circuit Court's Order

In Chapple v. Fairmont General Hosp., Inc., 181 W.Va. 755, 762, 384 S.E.2d 366, 373 Notwithstanding the general requirement established by our prior cases and the pronouncement in Rule 52(a) on findings of fact and conclusions of law, Justice Cleckley appropriately qualified this area in Gentry v. Mangum, 195 W.Va. 512, 521, 466 S.E.2d 171, 180 (1995), where we said that "on summary judgment, a circuit court must make factual findings sufficient to permit meaningful appellate review." Gentry instructs us that an order granting summary judgment cannot merely recite and rest exclusively upon a conclusion that, "No genuine issue of material fact is in dispute and therefore summary judgment is granted." For meaningful appellate review, more must be included in an order granting summary judgment. This Court's function, as a reviewing court is to determine whether the stated reasons for the granting of summary judgment by the lower court are supported by the record. 7 It was said in Mapleturn Utilities, Inc. v. Foxcliff South Associates, Inc., 673 N.E.2d 5, 10 (Ind.Ct.App.1996), that "[w]here the trial court enters findings of fact...

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